Merck & Co. found liable in nation's first Vioxx trial

Saturday, August 20, 2005

The Associated Press

ANGLETON, Texas -- A Texas jury found pharmaceutical giant Merck & Co. liable Friday for the death of a man who took the once-popular painkiller Vioxx, awarding his widow $253.4 million in damages in the first of thousands of lawsuits pending across the country.

A seven-man, five-woman jury deliberated for 10 1/2 hours over two days before returning the verdict in a 10-2 vote.

Plaintiff Carol Ernst began to cry when the verdict was read while her attorneys jumped up and shouted, "Amen!"

Jurors in the semi-rural county rejected Merck's argument that Robert Ernst, 59, died of clogged arteries rather than a Vioxx-induced heart attack that led to his fatal arrhythmia.

The case drew national attention from pharmaceutical companies, lawyers, consumers, stock analysts and arbitrageurs as a signal of what lies ahead for Merck, which has vowed to fight the more than 4,200 state and federal Vioxx-related lawsuits pending across the country. Merck said it plans to appeal.

After the verdict Friday, Merck shares dropped $2.35, or 7.7 percent, to close at $28.06, approaching the 52-week low of $25.60. Merck lost almost $5.2 billion in market capitalization.

Ernst called the verdict a "wake-up call" for pharmaceutical companies.

Merck lawyer Jonathan Skidmore said the appeal would center on what he believes was "unreliable scientific evidence."

"It'll be based on the fact that we believe unqualified expert testimony was allowed in the case; there were expert opinions that weren't grounded in science, the type that are required in the state of Texas," he said. "We don't believe they (plaintiffs) met their burden of proof."

The jury broke down the award as $450,000 in economic damages -- Robert Ernst's lost pay as a Wal-Mart produce manager; $24 million for mental anguish and loss of companionship; and $229 million in punitive damages.

But the punitive damage amount is likely to be reduced as state law caps punitive damages at twice the amount of economic damages -- lost pay -- and up to $750,000 on top of non-economic damages, which are comprised of mental anguish and loss of companionship.

That would give Ernst a maximum of $1.65 million in possible punitive damages, meaning her total damage award could not exceed $26.1 million.

"This case did not call for punitive damages," Skidmore said in a prepared statement. "Merck acted responsibly -- from researching Vioxx prior to approval in clinical trials involving almost 10,000 patients -- to monitoring the medicine while it was on the market -- to voluntarily withdrawing the medicine when it did."

But juror James Fruindenberg, one of the two who voted for Merck, said he "couldn't go with the probabilities" of what caused Robert Ernst's death.

"I think there are a lot of good people there who care," he said of Merck.

If the first wave of verdicts go against Merck, experts predict it will open the floodgates for more lawsuits and could force the drug company to settle cases. Analysts have speculated Merck's liability could reach $18 billion.

If Merck prevails in future cases, however, lawsuits could fade away, easing some of the pressure on its stock.

Another trial is set to begin in New Jersey, where Merck is based, next month, and the first federal trial in New Orleans is slated for late November.

Merck pulled Vioxx, a $2.5 billion seller, from the market in September 2004 when a long-term study showed it could double risk of heart attack or stroke if taken for 18 months or longer.

But unlike many other pending lawsuits involving obvious heart attacks, the Ernst case centered on an autopsy that attributed his death to an arrhythmia secondary to clogged arteries. That autopsy -- and the coroner who performed it -- proved critical to the trial's outcome.

Merck pointed to the autopsy as proof that Vioxx could not have caused the death of Ernst, who ran marathons and taught aerobics.

However, Dr. Maria Araneta, the pathologist who performed Ernst's autopsy, testified for Ernst that a blood clot that she couldn't find probably caused a heart attack that triggered Ernst's arrhythmia. She also said the heart attack killed Ernst too quickly for his heart to show damage.

While she couldn't say definitively that he had a blood clot and heart attack, she insisted they were the likely culprits in triggering an arrhythmia, which she said wouldn't happen on its own.

Araneta didn't blame Vioxx, however, noting she knew little about the drug when she performed Ernst's autopsy. But three plaintiff's experts in arrhythmia, cardiology and public health did.

Merck's experts agreed with Araneta's conclusions in the autopsy, but not her undocumented theory of what triggered the arrhythmia.